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Telkom South Africa Fined for Abusing Dominant Market Position
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South Africa's dominant landline operator, Telkom has been fined US$54.8 million for abusing its position in the market and making it harder for competitors to operate.
South Africa's Competition Commission ruled that between 1999 to 2005, Telkom refused to supply essential facilities to independent network operators and induced their customers not to deal with them.
The Commission also said that Telkom leveraged its upstream monopoly in the facilities market to advantage its own subsidiary in the competitive value added network market, which includes the provision of internet and virtual private network services.
The Commission had initially sought an administrative penalty of ZAR3.2 billion against Telkom, but found that the breaches of the Competition Act were limited in scope, and so the fine was set at just ZAR449 million (US$55 million).
The specific allegation was that Telkom had priced goods and services supplied to competitors at rates that were "excessive in themselves and discriminatory when compared to the rates" being charged to its own subsidiaries.
The company said in a statement that it is reviewing the report from the Commission. The South African government still owns a 39% stake in the former monopoly operator, with the state backed pension fund owning a further 10%.
On the web: Commission ruling (pdf file)
Tags: [telkom south africa] [South Africa]
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